Closing Costs - The Unexpected Costs of shopping for a HousePosted by Wentworth Norup on May 19th, 2021 There are costs, as well as the purchase price, that you will incur during closing. These closing costs are various fees charged by those involved with the transfer of the house from the seller to the buyer. Some fees are paid by owner; some are paid by the buyer. Who pays what is always negotiable. Do not ignore closing costs in your total purchase amount. What the customer Typically Pays All fees related to obtaining the loan. Appraisal-to confirm the price does not exceed market value. Home inspection-always have someone to know what you're really getting. Pest inspection-required in most Southern states because, in humid climates, there are plenty of crawly things that eat and destroy homes (termites, powder post beetles, flying ants, etc.). Homeowners insurance-typically prepaid for just one year at closing. Mortgage insurance-if borrowing more than 80 percent of the value of the property. How much are closing costs -often not required, nonetheless it does make certain property boundaries are accurate. Property taxes-from your day of closing to December 31. Interest-mortgage interest paid from date of closing to four weeks before first monthly payment arrives. Attorney fees-where applicable. Title insurance-yours and the lender's. Escrow fees-if you or the lending company choose to escrow any of your taxes or insurance. Loan discount points-if you paid for a lower interest rate. Fee for recording the documents. Transfer taxes-if there are any. Many states charge a tax to transfer property to a new owner. For example, per ,000 of selling price. Consult with your county, not state, to find out your rates. Typical Closing Costs and Their Definitions Appraisal Fee - The lender will require an appraisal. They want to confirm the value of the property they are lending against. The appraisal fee is paid to an appraiser to acquire an estimate of market value of the house. Attorney Fee - Attorney fees are paid to the closing attorney or Title Company for closing the transaction. Credit Report - An evaluation by a credit bureau of the buyer's credit habits. Hazard Insurance - Insurance that protects a house owner against damage caused by fires, severe storms, earthquakes, or other natural events. Typically, the customer will be required to purchase a year's worth of premiums at closing, but this can depend on the exact information on the policy.Like it? Share it! |